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Fitbit pumps up after second-quarter earnings beat

Fitbit jumps on earnings beat
Fitbit jumps on earnings beat

Shares of Fitbit rose more than 13 percent Wednesday after the company posted better-than-expected quarterly earnings and revenue and reaffirmed guidance citing strength in new products.

The wearable device-maker reported earnings of 12 cents per share, versus analysts' expectations of 11 cents, according to Thomson Reuters consensus. Revenues came in at $586.53 million versus the estimated $577.75 million.

The company sold 5.7 million devices in the quarter, with a 46 percent revenue increase year over year. The U.S. brought in the bulk of revenue at 76 percent for the quarter, Fitbit said.

Fitbit cited strong consumer response to new wearable products "Blaze" and "Alta", which launched in the first quarter. The two models made up 54 percent of second quarter revenue and added $3 to average revenue per device, the company said.

The company maintained its full year revenue guidance of $2.5 billion to $2.6 billion, and diluted earnings per share guidance range of $1.12 to $1.24.

James Park, Fitbit co-founder and CEO highlighted a positive response from retailers that have seen new products under a nondisclosure agreement in recent weeks. The feedback "strengthened confidence in our guidance for the year", Park said.

"We continue to lead the wearables category we helped to create and see substantial runway ahead," Park said on the earnings call. "I'm so confident that I will not sell any stock till the end of the year. Joining me in that commitment are co-founder and CTO Eric Friedman and CFO Bill Zerella."

The company also saw growth in the EMEA region, where the number of devices sold were up 100 percent year over year. Investments in local PR and marketing drove growth for the first half of the year, Park said.

"The first half European story has been about continuing to refine expanded visibility and resonance with the Fitbit brand in the region," Park said.

In May, the company launched a partnership with Alibaba, offering products on the Chinese site It also launched the Chinese, Korean and Japanese versions of Blaze and Alta in their respective markets.

"Localization is an important step in our development of international markets and we believe these new localizations will help accelerate both distribution partnerships and sales in those three markets," Park said on the call.

The impact of currency was "nominal" for the quarter, and the company said it does not expect an impact from Brexit on the third quarter's results.

The company also pointed to partnerships in the clinical research community. Fitbit and its partner Fitabase are working in more than 200 studies at universities including Johns Hopkins , Northwestern and University of Texas.

Shares of the wearable-device maker have lost nearly half of their value year to date and are down more than 69 percent year over year.